The NFIB Small Business Legal Center recently filed an amicus brief in a California Court of Appeal in support of a family owned business that is fighting for its right to be treated equally under the law. Gerawan Farming has been singled-out by the California Agricultural Labor Relations Boards (ALRB) for special legal burdens through a process called “Mandatory Mediation and Conciliation.” The so-called “MMC Regime” allows a labor union to petition the ALRB to force a targeted business into “arbitration.” Theoretically this should encourage the union and the business to hash-out a collective bargaining agreement, which will then govern how the company compensates its employees, as well as other terms and conditions of employment. But the MMC Regime goes further.
Not only does the MMC Regime force the parties to negotiate—it purports to compel the parties to reach an agreement. If they do not, the State of California, acting through an appointed arbitrator, will draw up a contract for the parties, and will then force the business owner to endorse the contract. And we think that is downright Orwellian.
Accordingly, our amicus filing argues that government violates the Constitution in seeking to force an individual or business into a contract. Of course government can regulate how employers treat their employees, but the State cannot force a targeted business to agree to a contract that will bind the business to abide by special legal requirements. To be sure, there is something egregiously wrong with imposing unique legal obligations on a single business in this manner.
For one, businesses have a constitutionally protected First Amendment right to oppose unionization. This freedom of speech protects the business from being forced to endorse a contract that the business finds objectionable, and which the owner believes to be against the best interests of the company. And even without getting into freedom of speech issues, the U.S. Supreme Court struck down a law in the 1920s which purported to allow the state of Kansas to force non-consenting parties to enter a contract. So clearly California is overstepping its rightful power in seeking to force Gerawan into a contested collective bargaining agreement in this case.
But, there is an even more fundamental problem with a regime that gives the government power to impose contracts on targeted companies. That is to say that government should not be allowed to target select businesses (or individuals) for heightened legal burdens without a compelling justification for this individualized treatment. Indeed in Gerawan’s case, the ALRB and the union are defending a compelled collective bargaining agreement that requires the company to increase pay to its employees—notwithstanding the fact that the company already pays more than industry average, and well above minimum wage.
It is one thing if the Legislature decides it wants to impose generally applicable regulatory requirements on a given industry, but quite another to single-out targeted businesses for heightened burdens simply because they have fallen under the crosshairs of union operatives. Accordingly, NFIB Legal Center is hoping the California Court of Appeals will side with Gerawan Farming—and we are therein encouraging the Court to strike down portions of the California Agricultural Labor Relations Act. And we believe this to be of nationwide concern because—all too often—bad ideas start in California. Indeed, if the California ALRB can get away with forcing collective bargaining agreements on small business—that sets a dangerous precedent for other states.
